SOLUTION TO DEL MONTE DISTRIBUTORS

CASE PROBLEM 2: 84% DEL MONTE DISTRIBUTORS WAS REGISTERED WITH THE
DEPARTMENT OF TRADE AND INDUSTRY AS A SINGLE PROPRIETORSHIP BY J. LOPEZ, THE
OWNER. THE COMPANY USES THE PERIODIC INVENTORY SYSTEM. YOU ARE ASKED
TO COMPLETE THE ACCOUNTING CYCLE.

The Business, DEL MONTE DISTRIBUTORS, was registered as a single

proprietorship with the Department of Trade and Industry. Juan Lopez invested P
39,000.00

April 1 Proprietorship with the Department of Trade and Industry. Juan Lopez
Invested P 39,000.00
2 Bought computer equipment for P 10,000.00 cash
2 Bought merchandise on account from LOWTOWN Supply Co. P 15,900.00,
terms 2/10, n/30
3 Bought office supplies on cash basis for P 700.00
4 Sold merchandise on account P 15,200.00, FOB Destination, terms 2/10,n/30.
The cost of the merchandise sold was P 12,200.00.
5 Paid P 200.00 freight on April 4 sale
6 Received credit from LOWTOWN Supply Co for merchandise returned P 300.00
11 Paid LOWTOWN
13 Collected from April 4 customers.
14 Bought merchandise on cash basis for P 14, 400.00
15 Salaries paid P 1,500.00
16 Borrowed money from RCBC BANK, signed a promissory note for P 12,000.00
17 Received refund from a supplier on cash purchase of April 14, P 500.00
18 Bought merchandise from MESDA, P 14, 200.00, FOB Shipping point, terms
2/10, n / 30
20 Paid freight on April 18 purchase, P 700.00
23 Sold Merchandise for P 16,400.00. The merchandise sold had a cost of P
10,500.00
26 Bought merchandise for cash P 12,300.00
27 Paid MESDA on the April 18 purchase, P 9,000.00. No discount allowed on
partial payment.
28 J Lopez got cash from the business, P 2,008.00
29 Made refund to cash customer for defective merchandise, P 900.00
30 Sold merchandise on account, P 13,700, n/30. Cost of the merchandise sold is
P 11,000.00
30 Paid the following : ADVERTISING P 1,000.00
UTILITIES 400.00
RENT 3,500.00
SALARIES 1,500.00
30 Inventory April 30, P 25,000.00
PAGE 3
 DEL MONTE DISTRIBUTORS
CHART OF ACCOUNTS

USE FOR JOURNALIZATION AND POSTING TO THE LEDGER

100 ASSETS 400 INCOME
101 CASH 401 SALES
105 ACCOUNTS RECEIVABLE 405 SALES RETURNS & ALLOWANCES
115 MERCHANDISE INVENTORY 410 SALES DISCOUNTS
120 SUPPLIES 500 EXPENSES
150 EQUIPMENT 501 PURCHASES
200 LIABILITIES 502 PURCHASE RETURNS AND ALLOWANCES
201 ACCOUNTS PAYABLE 503 PURCHASE DISCOUNTS
202 NOTES PAYABLE 504 FREIGHT IN
300 EQUITY 505 ADVERTISING
301 LOPEZ CAPITAL 506 FREIGHT OUT
302 LOPEZ DRAWINGS 510 RENT EXPENSE
530 SALARIES
540 UTILITIES
601 INCOME SUMMARY

DEL MONTE DISTRIBUTORS

CHART OF ACCOUNTS
USE FOR FINANCIAL STATEMENTS PREPARATION
100 ASSETS 400 INCOME
101 CASH & CASH EQUIVALENTS 401
105 RECEIVABLE 405 NET SALES
115 INVENTORIES 410
120 PREPAID EXPENSES 500 EXPENSES
150 PROPERTY PLANT & EQUIPMENT 501
200 LIABILITIES 502
201 ACCOUNTS PAYABLE 503 COST OF GOODS SOLD
202 NOTES PAYABLE 504
300 EQUITY 505 ADVERTISING EXPENSE
301 LOPEZ CAPITAL 506 FREIGHT OUT
302 LOPEZ DRAWINGS 510 RENT EXPENSE
530 SALARIES
540 UTILITIES
601 INCOME SUMMARY

PAGE 4
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 1 CURRENT JOURNAL ENTRIES MARK

DATE DESCRIPTION REF DEBIT CREDIT

TOTAL
Page 5
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 2 CURRENT JOURNAL ENTRIES MARK

DATE DESCRIPTION REF DEBIT CREDIT

PAGE 6
GENERAL JOURNAL ( 9 CHECKMARKS ON THIS PAGE)
PAGE NUMBER 3 CURRENT JOURNAL ENTRIES MARK
DATE DESCRIPTION REF DEBIT CREDIT

TOTAL
PAGE 7
PAGE NUMBER GL =1
ACCOUNT

BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

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PAGE NUMBER GL =2
ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

PAGE 9
PAGE NUMBER GL =3
ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBIT CREDIT BALANCE
DEBIT CREDIT

PAGE 10
PAGE NUMBER GL -4
ACCOUNT
DATE ITEM POST DEBOT CREDOT BALANCE
DEBIT CREDIT

ACCOUNT

BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT

BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT

BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT

BALANCE
DATE ITEM POST DEBIT CREDIT DEBIT CREDIT

ACCOUNT
DATE ITEM POST DEBOT CREDOT BALANCE
DEBIT CREDIT

PAGE 11
 DEL MONTE DISTRIBUTORSHIP

COST OF GOOD SOLD

FOR THE PERIOD ENDED APRIL 30, 2016

TOTALS

PAGE 12
 DEL MONTE DISTRIBUTORSHIP

STATEMENT OF EQUITY

FOR THE PERIOD ENDED APRIL 30, 2016

TOTALS

PAGE 13
 BARRETO

STATEMENT OF PERFORMANCE
FOR THE PERIOD ENDED APRIL 30, 2016

PAGE 14
 DEL MONTE DISTRIBUTORSHIP
STATEMENT FOR FINANCIAL POSITION
FOR THE YEAR ENDED APRIL 16,2016

DEBIT CREDIT

PAGE 15
 DEL MONTE DISTRIBUTORS
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED APRIL 30, 2016

PAGE 16
DATE DESCRIPTION REF CLOSING JOURNAL ENTRIES

DEBIT CREDIT

PAGE 17
 BARETTO
POST CLOSING TRIAL BALANCE
APRIL 30

PAGE 18
CASE PROBLEM 2 SET 1
2.1 BDO, a bank lent P100, 000.00 to a customer on December 1 that required a customer to pay
An annual percentage rate (APR) of 12%. On the amount of loan. The loan is due in six month
And no payment of interest or principal is to be made until the note is due on May 31. Body
Prepares monthly financial statements at the end of each calendar month. Provide an answer
March only.

2.2 In December 1, AXA insurance COMPANY received P 2,400.00 from your company for the
Annual insurance premium covering the twelve month period beginning on December 1. AXA
Insurance co. recorded the P 2,400.00 receipt as of December 1 with a debit to the current
Asset cash and a credit to the current liability unearned revenues. AXA insurance Co prepares
Monthly financial statement at the end of each calendar month. Provide an answer for April
Only.

2.3 On December 1, FORTUNE began operations, On December 4, it purchases P1, 500.00 of

supplies And recorded the transaction with a debit to the balance sheet account supplies
And a credit to the current liability Accounts Payable. FORTUNE COMPANY prepares
monthly financial statements at the end of each calendar month. At the end of the day on
December 31, Fortune Company estimated that P700.00 of the supplies were still on hand in
the supply room. The following questions pertains to the adjusting entry that should be
entered by
FORTUNE COMPANY

Requirements: Answer the questions pertaining to the adjusting entries for each the three
cases.
Use the answer sheet provided for CASE2 set 2

What is the Case 2.1 Case 2.2 Case 2.3

adjusting entry
Date of the Adjusting January 31 March 31 December 31
entry
Debit account title Interest Receivable Unearned Revenue Supplies Expense

Credit account title Interest Income Revenue Supplies

Debit & credit Amount P 1,000.00 P 200.00 P 800.00

PAGE 19
CASE PROBLEM 2 SET 1
2.1 SMA company borrowed P100,000.00 on December 1 by signing a six month note that
specifies interest at an annual percentage rate( APR ) of 12%. No interest on principal payment
is due until the note matures on May 31, SMA company prepares financial statements at the end of
each calendar month, provide an answer for the month end of January only.

2.2 In December 1, JEM paid its insurance agent P 2,400.00 for the annual insurance premium
Covering the twelve month period beginning on December 1. The P 2,400.00 payment was
Recorded on December 1 with a debit to the current asset prepaid insurance and a credit
To the current asset Cash. JEM company prepares monthly financial statements at the end
Of each calendar month. Provide an answer for the month end of March Only.

2.3 On December 1, CLM began operations, On December 4, it purchases P1,500.00 of supplies

And recorded the transaction with a debit to the income statement account supplies
expense
And a credit to the liability Accounts Payable. CLM prepares monthly financial statements at
The end of each calendar month. At the end of the day on December 31, SOX Company
estimated that P700.00 of the supplies were still on hand in the supply room.

Requirements : Answer the questions pertaining to the adjusting entries for each the three cases.
Use the answer sheet provided for CASE2 set 1

What is the Case 2.1 Case 2.2 Case 2.3

adjusting entry
Date of the Adjusting January 31 March 31 December 31
entry
Debit account title

Credit account title

Debit & credit Amount

Page 19